Clover Moore's opponents criticised the failed Cloud Arch sculpture as an "unmitigated disaster from the outset" as the majority of councillors voted to hit pause on the troubled project at the meeting on Monday night.

The council blamed cost blowouts and light rail construction for its decision to cancel the proposed tender for the Junya Ishigami-designed steel archway planned for George Street and defer consideration of the project until after the tram line is finished.

It emerged last week that the price for building the arch, which at one stage was to have cost about $3.5 million, had blown out to $22 million. That was on top of the $2.25 million the council has spent on the artwork over the past three years.

Council papers said the cost had increased again following a more recent estimate of $11.3 million because of design changes necessitated by the light rail construction, delays to work caused by the tram project and other associated costs caused by those delays.

Cr Moore said it was "a sad but sensible decision" to delay work on the $22 million sculpture. "There has been a lack of cooperation and in fact we have been hampered in every way with this exciting project," she said.

But Councillor Kerryn Phelps, who sensationally quit Cr Moore's group of independents in 2017, said she was angry that councillors had not been "fully informed" about "ongoing problems that have dogged the project since 2015".

"I have been voicing my concerns for over a year and I have been rebuffed by those on the other side over and over again as being 'anti-public art' or concocting concerns about financial management," she said.

"I find it hard to believe that, had all councillors been fully informed about the nature of this project from the beginning, that so much time and taxpayer money would have been spent on its development."

Liberal councillor Christine Forster said those problems were foreseeable and the project should have been abandoned after the first cost blowout in 2017.

"The reality is that this project has been an unmitigated disaster from the outset," Cr Forster said.

"We should be ruling out right now ever proceeding with this ridiculous vanity project."

But the councillors' criticism was rejected by members of Cr Moore's team.

"The idea that this was foreseeable by the council is inaccurate," councillor Jess Scully said. "I think we need to persist with visionary pieces of art.

"It is so unfortunate that we've been hampered in those efforts by a contractor who is not upholding their side of the deal."

Councillor Philip Thalis said: "This would have made Sydney a better city."

Deputy lord mayor and Labor councillor Linda Scott, who previously voted in support of the artwork despite expressing reservations about its expense, said the city needed "an injection of public art".

"I think that it continues to be the right thing and continues to be something that is beneficial to the future of the city," she said.

The recommendation to defer the cloud arch was approved six votes to four, but not before Liberal councillor Craig Chung put forward an amendment that would have scrapped the project entirely. That amendment was voted down by the majority of councillors.

Cr Moore rejected the accusation that Cloud Arch had been "my pet project", pointing to public support and endorsements from high-profile backers of the artwork in the arts and business sectors.

They included Sydney Business Chamber executive director Patricia Forsythe, Carnival Australia boss Ann Sherry, artist John Kaldor and architect Penelope Seidler.

"There is great sadness but a strong understanding of why we had to take the action we're taking tonight," Cr Moore said.

"Many people would hope Cloud Arch would make a return in the future. [It is] a truly heroic work."

The decision means the council will have the option to reconsider the artwork once the light rail is finished and as part of a future Town Hall Square project.